October 7, 1978
Page 34581
Mr. METZENBAUM addressed the Chair.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. METZENBAUM. Mr. President, I call up an amendment at the desk that is cosponsored
Mr. STEVENS. Without losing his right to the floor, will the Senator yield to see if we can work some things out here?
Mr. METZENBAUM. I would like to say to the Senator, I said 10 minutes on the side. Senators CHAFEE, HEINZ, and LEAHY may want to be heard. I think 15 minutes on a side will be fine.
Mr. STEVENS. The Senator from Ohio would agree to a time limit of 15 minutes on a side, does that meet with approval?
Mr. President, I ask unanimous consent that following the Senator from Ohio; the Senator from Pennsylvania (Mr. HEINZ) be recognized to present an amendment, that there be 1 hour time limit on that; that the Senator from Utah (Mr. HATCH) be recognized on Monday morning following the recognition of the two leaders to call up his amendment, and that the time limit be 1½ hours, equally divided, on his amendment.
Mr. JAVITS. Mr. President, reserving the right to object, this is really carving—
The PRESIDING OFFICER. The Senate is not in order.
The Senator from New York.
Mr. JAVITS. Mr. President, these priorities take no account of the fact that many of us have amendments and have been standing around here for hours, and it appears that it is going to be days, putting these things back to back.
We have had a unanimous consent request for the Senator from Ohio and the Senator from Utah. For the moment, ] would respectfully suggest that the Senator from Alaska withhold his request until some of the rest of us can put their amendments before him, before we gel blacked out. That blocks Monday morning.
Mr. PROXMIRE. Mr. President, reserving the right to object, I join the Senator from New York.
Mr. STEVENS. Mr. President, I withdraw the request.
Mr. PROXMIRE. Before we agree to a unanimous consent request limiting time, we should know what we are agreeing to, what the amendment is, some notion of whom it affects, and so forth That is going to be the position taken by the Senator from Wisconsin from now on.
Several Senators addressed the Chair
The PRESIDING OFFICER. The Senator from Ohio has the floor.
Mr. HATCH. Mr. President, will the Senator yield to me?
Mr. METZENBAUM. Without losing my right to the floor, I yield.
Mr. HATCH. Mr. President, I do not care when I bring up my amendment except that I want it to be before cloture
I have tried to cooperate all the way down the line. I have allowed the Senator from Ohio to get ahead of me. I had an understanding that I would be able to go first.
My amendment will take a lot of time, if I give it the due time I think it is worth, but I will cut the time down. I am willing to be cooperative with everybody, but apparently I have caused a little furor here.
If the Senator wants me to go ahead this evening, I will go immediately following Senator METZENBAUM. All I want to do is to get some order. It is late this evening. It normally would take an hour and a half on both sides, equally divided. I will cut that down to an hour.
Mr. JAVITS. An hour is all right.
Mr. HATCH. Mr. President, I ask unanimous consent that I follow immediately the Senator from Ohio and that I have a time limitation of 1 hour, divided equally.
The PRESIDING OFFICER. Is there objection to the request?
Mr. McGOVERN. Mr. President, I do not understand this procedure, as to why one Senator is given preference and recognition. A lot of us have been here all day. We are just as eager as the Senator from Utah to be recognized. I object.
The PRESIDING OFFICER. Objection is heard.
Several Senators addressed the Chair.
The PRESIDING OFFICER. The Senator from Ohio has the floor.
Mr. MUSKIE. Mr. President, will the Senator yield 30 seconds?
Mr. METZENBAUM. I yield, without losing my right to the floor.
Mr. MUSKIE. Mr. President, I have been so involved in my own—
The PRESIDING OFFICER. May we have order, so that the Senator from Maine can be heard?
Mr. MUSKIE. Mr. President, I want to make this point, because the point is important. It has to do with a procedure under the Budget Act which we never have had occasion to use before, and I want Senators to be aware of it.
Under the Budget Act, I am required to keep score on both the House bill and the Finance Committee substitute, as both bills remain open to amendment until either is adopted. I am required to file at the desk every morning the price of everything we have agreed to up to now. Up to now, we have only $16 million remaining room for additional revenue losses related to amendments.
It is my responsibility, under the Budget Act, to raise points of order as to any amendments which would exceed that amount. I have not had an opportunity to evaluate the revenue cost implications of all the amendments that may be offered or that conceivably may be offered.
I just give Senators this word, because I do not want them to be surprised when I invoke this procedure. I am required to do so; and if I fail to do so with respect to any amendment, I might well be charged with favoritism.
So I will have to do that, and I will try to do it as fairly and as closely as possible. If my staff approaches any Senator who is offering an amendment, to find out what the cost implications are, that will be the purpose; and if it reaches the numbers, I will have to raise a point of order.
Mr: LONG. Mr. President, will the Senator yield?
Mr. MUSKIE. On the time of the Senator from Ohio.
Mr. LONG. If the Senator from Ohio will permit.
If the Senator, by chance, should fail to do so, I will backstop him; because I also will object if it exceeds the budget.
Mr. MUSKIE. I thank the Senator.
UP AMENDMENT NO. 2020
Mr. METZENBAUM. Mr. President, is there a limitation on time? I do not believe one was agreed to on my presentation.
The PRESIDING OFFICER (Mr. MATSUNAGA) . There is no time limitation at this time on the amendment of the Senator from Ohio.
Mr. METZENBAUM. I will be brief. Mr. President, Senators CHAFEE, GLENN, HEINZ, LEAHY, PELL, STAFFORD, ANDERSON, and JAVITS have joined me today in offering an amendment that expands the investment tax credit to cover expenses incurred in rehabilitating existing structures. This amendment goes to the question of the older properties of this country. .
The PRESIDING OFFICER. The Chair reminds the Senator from Ohio that we do not have a copy of his amendment at the desk.
Mr. METZENBAUM. The amendment was filed yesterday. Apparently, it has not been printed as yet. I send an additional copy to the desk; and if any other Member of the Senate cares for a copy, I have a few extra copies.
The PRESIDING OFFICER. The amendment will be stated.
The legislative clerk read as follows:
The Senator from Ohio (Mr. METZENBAUM) , for himself and others, proposes an unprinted amendment numbered 2020.
Mr. METZENBAUM. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the appropriate place in the committee substitute bill, insert the following new section:
Sec. . Investment Credit Allowed For Certain Rehabilitated Buildings.
(a) IN GENERAL — Paragraph (1) of section 48(a) (defining section 38 property is amended by striking out the period at the end of subparagraph (C) and by inserting in lieu thereof " ; or" and the following new subparagraph:
"(D) in the case of a qualified rehabilitated building, that portion of the basis which is attributable to qualified rehabilitation expenditures (within the meaning of subsection (g) )."
(b) Qualified rehabilitated buildings defined. Section 48 is amended by inserting after subsection (f) the following new sub-section:
"(g) Special Rules for Qualified Rehabilitated Buildings. For purposes of this sub-part
"(1) Qualified Rehabilitated Building defined
"(A) IN GENERAL.— The term 'qualified re-habilitated building' means any building (and its structural components)—
"(i) which has been rehabilitated,
"(ii) which was placed in service before the beginning of the rehabilitation, and
"(iii) 75 percent or more of the existing external walls of which are retained in place as external walls in the rehabilitation process.
"(B) 20 years must have elapsed since construction or prior rehabilitation. A building shall not be a qualified rehabilitated building unless there is a period of at least 20 years between—
"(i) the date the physical work on this rehabilitation of the building began, and
"(ii) the later of—
"(I) the date such building was first placed in service, or
"(II) the date such building was placed in service in connection with a prior rehabilitation with respect to which a credit was allowed by reason of subsection (a) (1) (D).
"(C) Major portion treated is separate building in certain cases. Where there is a separate rehabilitation of a major portion of a building, such major portion shall be treated as a separate building.
"(D) Rehabilitation includes reconstruction. Rehabilitation includes reconstruction.
"(2) Qualified rehabilitation expenditure defined.
"(A) IN GENERAL.— The term 'qualified rehabilitation expenditure' means any amount properly chargeable to capital account which is incurred after July 26, 1978.
"(i) for property (or additions or improvements to property) with a useful life of 5 years or more, and
"(ii) in connection with the rehabilitation of a qualified rehabilitated building.
"(B) Certain expenditures not included. The term 'qualified rehabilitation expenditure' does not include.
"(i) Property otherwise section 38 property. Any expenditure for property which constitutes section 38 property (determined without regard to subsection (a) (1) (D) ).
"(ii) Cost of acquisition. The cost of acquiring any building or any interest therein.
"(iii) Enlargements. Any expenditure attributable to the enlargement of the existing building.
"(3) Property treated as new section 38 property. Property which is treated as section 38 property by reason of subsection (a) (1) (D) shall be treated as new section 38 property."
(c) Technical Amendment. Paragraph (8) of section 48(a) (relating to amortized property) is amended by striking out "or 188" and inserting in lieu thereof "188, or 191".
The PRESIDING OFFICER. The Senator from Ohio is recognized in support of his amendment.
Mr. METZENBAUM. Mr. President, this amendment has one purpose, and one purpose alone. It is to meet the problem of the older, decaying areas of our downtown communities as well as those that are in the outskirts. It pertains to small cities and large cities.
Very simply, the amendment provides that a 10-percent investment credit shall be available with respect to older properties; and, by definition, it provides that the properties must be at least 20 years old.
I point out to the Members of the Senate that the House has this provision in its bill, except that the House provision would provide for the investment credit to be applicable for properties that are 5 years old or more. That, to me, seems to be an unreasonable figure.
I do not believe the problems to which I want to address myself have to do with properties that are almost new. A property that is 6 years old, 7 years old, or 8 years old is an almost new property. But a property that is more than 20 years old, that you find in the downtown areas of Cleveland, in Youngstown, in New Jersey, in New York, in the States across the country, whether they are in the Northwest or the Southwest or the Southeast or the Midwest or the north Atlantic — we are talking about these old properties.
In the past, we have made it possible to provide the investment tax credit for machinery and equipment, and I have had some reservations about that matter; but that is not the subject to which we address ourselves today.
We talk about pouring billions of dollars — not millions of dollars, billions of dollars — into the old areas of our country, trying to save the cities of America. But the fact is that this amendment — which will have an impact upon the Federal Treasury, and the impact is not that significant — Mr. President, may I have order?
The PRESIDING OFFICER. The point of order is well taken. The Senate will be in order. Senators will cease conversation on the floor. Authorized staff will retire to the rear of the Chamber.
Mr. METZENBAUM. Mr. President, we think nothing of a program for billions of dollars to help urban America, to help rural America, to help the farm lands of this country. This is not that kind of amendment. This amendment does not provide for any subsidy. It merely says that a company that owns an old department store in a downtown area, or an old factory, or an old hotel, or an old theater, has an opportunity to rehabilitate that property.
The amendment requires that it is not applicable to a new building. At least 75 percent of the walls must remain standing. The amendment is not applicable to expansion. The amendment is applicable to taking the decay and the blight that we have grown up with in our cities and trying to provide some assistance to those companies and those individuals who are willing to go in and rehabilitate those old properties.
There will be a minor impact upon the Treasury, yes — $60 million — but it is a pittance as compared to what it costs the people of America in trying to bring back our downtown communities.
I hope the Senate will see fit to accept this amendment. I hope the chairman of the Finance Committee will see fit to accept it. I believe it has merit, and I think the fact that we have gone to 20 years instead of the 5 years the House has in its bill makes it that much more meritorious.
Mr. LONG. Mr. President, the item for which the Senator speaks would be in conference, in any event. The House bill has such a provision relating to buildings that have been in existence for more than 5 years.
And so the matter will be discussed in conference.
To agree to this amendment would be to insure that this item would take precedence over all the other things in the bill. For example, the Senate voted for the rate cut for all individuals, middle income people and all those with lower income. The Senate voted for a number of other things here, the tuition credit for example, that are generally available to all people.
If this amendment were agreed to, we already have told the Senate we are already breaking the bank. Even if we do not have an energy bill, we still would be right up against the budget already, and this amendment would put us over it. This would mean that we are going to place a higher priority on this item than the other things, such as tax relief for middle income people, tax relief for the poor, and tax relief for people sending their children to school. They would not have the same opportunity to have their problems considered in conference as those who would otherwise benefit from this provision. The matter would be in conference anyway and should be left at that.
Mr. President, on the merits, there is a legitimate question of whether it serves any purpose to encourage someone to spend his money rehabilitating an old structure inside a city rather than build a new shopping center, for example, or a new office building on the outskirts of the city where there might be a lot more people.
To give a tax credit to one building and not to give a tax credit to another building tends to discriminate. In many cases, it is a better thing for a community to build a new shopping center or a new office building somewhere else rather than rehabilitate an old building in a part of town from which the population is going to move away no matter what they do with the old building.
Incidentally, Mr. President, we have heard all this conversation for days now about tax expenditures. This is a tax expenditure that only benefits certain people. It discriminates in favor of one kind of investment and against another kind of investment. It discriminates in favor of the old parts of the country against the new parts of the country.
Mr. President, the committee thought about all this and concluded that as of the many things we could do to help taxpayers, this claimed the lower priority than the other things we had in the bill.
I submit that it claims the lower priority than the things that have been voted on here in the Chamber. In other words, as between a tax credit for tuition or a tax cut for lower or middle income people and a tax credit to rehabilitate an old building — we are not talking about a historic structure, just talking about any nonresidential building 20 years old — it just does not claim that high priority.
Mr. President, I hope the amendment will not be agreed to.
Mr. THURMOND. Vote.
Mr. MUSKIE addressed the Chair.
The PRESIDING OFFICER. The question is on agreeing to the amendment offered by the Senator from Ohio.
Mr. MUSKIE addressed the Chair.
The PRESIDING OFFICER. Is someone seeking recognition?
Mr. MUSKIE addressed the Chair.
The PRESIDING OFFICER. The Senator from Maine.
Mr. MUSKIE. Mr. President, we are in the process of having a discussion with the distinguished Senator from Ohio, and I do not want to prematurely state a conclusion with respect to its costs. I wonder if we might have a brief quorum call until we have discussed some options that the Senator from Ohio wishes to consider to modify his amendment to avoid any budgetary implications.
Mr. METZENBAUM. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.